ECONOMYNEXT – Sri Lanka’s state-run Ceylon Electricity Board reported profits of 5.31 billion rupees in the June 2025 quarter, down from 34 billion rupees a year earlier, amid two tariff cuts in between.
CEB’s June 2025 quarter revenues were down 33 percent from a year ago to 98 billion rupees, cost of sales were down 16 percent to 91.6 billion rupees and gross profits were down 81 percent to 7.0 billion rupees.
Compared to March revenues rose from 93 to 98 billion rupees in June while cost of sales fell steeply from 112 to 92 billion rupees, giving gross profits of 11 billion rupees compared to an 18 billion loss in March.
The March quarter is usually the driest quarter of the year, when more thermal energy has to be generated.
The CEB posted a 13.1 billion rupee loss for the six months to June, due to an 18 billion rupee loss in the March 2025 quarter,
At group level the CEB made profits of 7.4 billion rupees in the June quarter and a loss of 9.5 billion rupees in the six months.
The CEB made large losses in the March quarter after prices were cut by the regulator, which were not asked for by the utility.
The price cut was reversed after the International Monetary Fund delayed approval for its program.
CEB is required to run cost-reflective tariffs to protect public finances, after losses in state energy enterprise contributed to a sovereign default.
A revenue increase of around 15 percent was granted in June.The new tariffs will kick in from the September quarter.
The CEB also has a large volume of short term borrowings taken to finance losses when the rupee fell under flexible inflation targeting, for which tariffs hikes were not given by the regulator or sometimes not publicly asked for due to political pressure.
Interest bearing short-term borrowings were reduced from 236 billion rupees in March to 218 billion rupees in June.
Because short term borrowings were not taken to finance capex, there is no depreciation to cover the repayments, without adding to the national debt.
The CEB also needs large investments to upgrade its grid to accommodate renewable energy and avoid blackouts.
The utility recent called bids from private investors for battery system as a built operate own (BOO) project.
The CEB also has to put more transformers in the distribution grid, and built more transmission lines to connect renewable plants in remote locations to the national grid. (Colombo/Aug16/2025)
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